Russian Journal of Agricultural and Socio-Economic Sciences (Mar 2019)

ANALYSIS OF THE EFFECT OF PRODUCTION, PROMOTION AND DISTRIBUTION COSTS TOWARDS COMPANY’S SALES OF THE FAST MOVING CONSUMER GOODS SECTOR

  • Hapsari W.,
  • Sumarwan U.,
  • Wijayanto H.

DOI
https://doi.org/10.18551/rjoas.2019-03.21
Journal volume & issue
Vol. 87, no. 3
pp. 175 – 182

Abstract

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The purpose of this study is to analyze the influence of production costs, promotion costs, and distribution costs partially on the value of sales and analyze the influence of production costs, promotion costs, and distribution costs together on the value of sales. Consumer goods companies are closely related to the increasing consumption of society. The sector involves a large amount of labor compared to other industries. Therefore, cost control is needed by the company to regulate the availability of funds so that it is sufficient to finance operational activities. The sampling method in this study was purposive sampling or judgment sampling. The research data are panel data consisting of time series data and cross section. The time series data used is company data for 2012-2016. The cross section data consists of 23 consumer goods sector companies listed on the Indonesia Stock Exchange. There are four variables in this study, namely the independent variable consists of variable production costs, promotion costs, and distribution costs, while the dependent variable is the sales variable. Processing and technical data analysis in this study is descriptive statistical analysis, panel data, and model suitability tests using SPSS and Eviews software. Based on the results of the analysis using the panel data regression equation the results of the best method are obtained by the Fixed Effect Model. Based on the results of the analysis using a fixed effect model, the consumer goods company promotion and distribution variables have a significant influence on the value of sales. The company must have a supervision and quality control department that works in every production process. In the consumer goods sector companies that are directly related to consumers, they can directly carry out promotions through advertisements in electronic media and print media. The increasing growth of internet users can also be an opportunity for marketing channels. By utilizing the internet, companies can create e-commerce platforms to reach wider consumers.

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